| ▲ | epolanski 18 hours ago |
| It's literally impossible to default as you can simply emit new money and buy back the debt or pay the interest with the minted money. Of course this comes with its own set of gigantic issues, likely triple digit inflation and hardship to raise money for generations. But US can't default really. |
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| ▲ | 2dddd 16 hours ago | parent | next [-] |
| Ofc the US can default and it will most likely in the event. Debasement is far more painful - the treasury will simply choose not to come good on the obligations. |
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| ▲ | epolanski 10 hours ago | parent [-] | | Nonsense. Credit worthiness is a must and you're talking about the savings and liquidity of all the world, us citizens, banks and institutions included. There's a reason Germany and Italy can borrow lots of money at relatively low costs despite everything: no matter the economic crisis, no matter the inflation, no matter if the countries were in rubbles post not one, but two world wars, they always paid their debts. I'm not sure how can you imagine that defaulting can be anywhere better than increasing inflation. And the US in particular has the huge advantage of being able to mint the money to back it. |
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| ▲ | partloyaldemon 17 hours ago | parent | prev | next [-] |
| You’re the only one in the thread that gets any of this right. But: Monetizing the debt is replacing one asset (treasuries eg) that pays interest with a nominally equal asset that doesn’t (US dollar). How does that spur inflation? It’s a reduction in income over time. How does paying back our debt IN FULL hurt our credit worthiness? |
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| ▲ | SpicyLemonZest 16 hours ago | parent [-] | | Money is special because it’s the only asset that can be used to purchase goods and services. If I have a pile of 10 year Treasury bonds worth $500, and I want to buy a TV, I have to first convince someone with $500 in cash that they’d rather have my bonds than buy their own TV. | | |
| ▲ | 2dddd 16 hours ago | parent [-] | | No thats not true. It operates under expectations - the more liquid the asset, the more likely you'll be OK with accepting it in the context of a trade. The discount is for illiquidity. | | |
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| ▲ | kotaKat 17 hours ago | parent | prev [-] |
| > But US can't default really. It could. We'd just reorganize and call the old debts part of "Old US". This is all "New US". |
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